Suffering HTC says 2013 “will not be too bad”

The new strategy: be more flexible with advertising and step up innovation.

With the spirit of CES wafting in the air, companies are taking the opportunity to speak out about their strategies for business in the new year. One such company is HTC, which the Wall Street Journalreports has vowed to win customers back by developing “more innovative products.”

2012 was one of the worst years for HTC, as the company fell far behind major players like Apple and Samsung—two companies that have claimed the smartphone throne with devices like iPhone and the Galaxy S III. HTC’s earnings in the third quarter dipped down to its lowest level in six years, with its share price hovering in the red zone, down 80 percent from its highest point in 2010. To make things worse, HTC’s global market share was only 2.2 percent last quarter according to Gartner.

HTC Chief Executive Officer Peter Chou said in an interview with the WSJ that the worst for the company has “probably passed” and that this year “will not be too bad.” He went on to say that “our competitors were too strong and very resourceful, pouring lots of money into marketing.”

Chou admitted that the company hadn't done much to market its products, though he didn't offer any explicit plans on how the company will proceed with its marketing strategy, either. He did go on to mention that “the most important thing is to have unique products that appeal to consumers.”

As Ars reported back in November, HTC has no outstanding brand name, and the persona it once carried as the flagship Android phone with carriers like Verizon has been replaced by bigger players—like Samsung, for instance. To its detriment, HTC hasn't done much to advertise its new handsets. “They need to stand out. At the moment, they don’t,” Christina Milanesii, research VP of consumer devices at Gartner, had told Ars. “They need to put more muscle in advertising and really understand who they want to be.”

According to Chou, this is just where the company wants to go. “We are being more flexible now,” he says in the article. “We are constantly fine-tuning our sales plans and position in various markets.”

38 Reader Comments

It may be petty, but I'd only consider buying something from them if they drop Beats and Beats branding from their products. Looks like their contract with Monster is up (Beats, not HTC), so maybe that will happen. Until then, not buying their stuff because I refuse to give Monster a single dime.

I'm rooting for them. More marketing is a given - it worked for Samsung, who plastered the GSIII and GNII all over San Francisco's subway stations and kiosks with their tagline, "The next big thing is already here". It works. Everyone's heard of the Galaxy line.

Fewer carrier exclusives seem like a no-brainer, at least not phones from the One line if they're still trying to build up that brand.

Sense needs an overhaul, but I don't agree that stock Android is an answer like the internet claims it is. Stock Android's styling looks pretty niche to me; it's like trying to get people to buy modern furniture for their homes. With unlabeled buttons. No, it's clear that consumers are comfortable with skins... they just need to be freshened up now and then.

I don't know if SD cards and removable batteries are only popular among a small niche. SD card support doesn't have any terrible downsides, so I'd want it. Removable batteries may not be compatible with HTC's designs, and that's one of the few calling cards they have so I wouldn't expect that to change.

I can't help but think of the 8x right now...big fish in a small pond, to be sure, but nonetheless they have created a compelling Windows Phone 8 handset that people are excited about. Perhaps HTC could be more successful by slimming down and focusing on more niche products, instead of trying to take on Samsung directly?

Marketing isn't the solution. I owned a One S and now a GS3 - Samsung is just making better devices. HTC does a complete OS and driver overhaul with Sense, and it's resulted in longer waits for OS updates. They've always been out of touch with battery life. Beats is a useless gimmick. They have nice industrial design, but so does everyone else at this point.

I wish they'd step away from Sense, focus on battery life the way Samsung and Motorola have, and pair it with their good design. And maybe try to lead the pack on non-Nexus OS updates.

They also seem to be the heading toward enclosed batteries and no SD cards on most of their new handsets. Maybe they'll realize that the decision isn't resulting in more users.

I feel like it's a shame, because I loved my Evo from a few years back. It came down to a decision between the Galaxy S3 and the HTC One (X?). I chose the Galaxy S3, and it's a great phone, but there are some annoyances with it. It's a little on the large side, and that coupled with it being very slippery, it flies out of my hand sometimes. The keyboard is pretty weak on the Samsung as well. I replaced it with Go, which is nice, but it still doesn't feel quite on par with typing on my Evo (I prefer typing sideways on the device, which seems to be a little bit of a rarity or something). Not sure if the One had a similar keyboard or not.

Oh well, hopefully they get back some decent marketing share. They felt like a competitive company, and different from many of the others, in a good way. That's just me though.

Marketing isn't the solution. I owned a One S and now a GS3 - Samsung is just making better devices. HTC does a complete OS and driver overhaul with Sense, and it's resulted in longer waits for OS updates.

Sense and TouchWiz have nothing to do with longer waits for OS updates. That's entirely down to the bureaucratic bullshit red tape known as carrier testing/approval.

My feeling about HTC is that they make good products with no compelling reason to choose them over the competition. Why don't they try competing for an underserved niche? The stylus-driven phone seems to have been reasonably successfuly for Samsung, but I don't see anyone else making one. HTC could focus on outdoing Sammy at that. Or maybe make a good slide-out keyboard (they used to, didn't they?). They definitely can't out-advertise Samsung, so they need be the best at something.

It's the One-X. Anyone who's been on the internet knows that. Maybe you don't but that's okay.

If your point was to show how HTC has bad marketing, then please RTFA; that's exactly what they plan on doing better.

Nope. It's the One X+ now. Or the Sprint version of the One X. Or Maybe the Droid DNA because it has a higher res screen, or one of it's international variants. They really do have a confusing product line. Samsung's is simple, Galaxy S III and it's on basically every carrier too. HTC has a different flagship for every one that are all slightly different.

It's the One-X. Anyone who's been on the internet knows that. Maybe you don't but that's okay.

If your point was to show how HTC has bad marketing, then please RTFA; that's exactly what they plan on doing better.

Nope. It's the One X+ now. Or the Sprint version of the One X. Or Maybe the Droid DNA because it has a higher res screen, or one of it's international variants. They really do have a confusing product line. Samsung's is simple, Galaxy S III and it's on basically every carrier too. HTC has a different flagship for every one that are all slightly different.

....You just said "One-X" twice. I don't see what's so difficult to understand? The One-X is clearly known enough, "+" or "Evo 4G LTE" be damned. When the Galaxy S2 on Sprint was called the Epic Touch 4G, people still knew it was the GS2.

The Droid DNA is irrelevant in this discussion, because most people think "Verizon" makes the Droid, in the same way the OG Droid wasn't marketed as a Motorola creation, it was a "Verizon" thing.

The simply point still remains (although you are unable to see the pointlessness of your own post); if you're bitching that people don't know what the flagship is, you're wrong; if you're bitching that not enough people know what the flagship is, HTC is trying to fucking fix that, hence RTFA.

Yes, I was looking at a droid dna handset, it's much better than the S3, faster and more ram, but I imagine must people will just wait for the S4 to come out in april that'll have the same spec.

In the UK HTC desire was the phone that everyone wanted and that made android popular. Samsung did very well to attract a market away from HTC's established market share, but they did so with a great product.

Still, look forward to HTC's innovation, good stuff with charging, expansion cards or drives, connectivity to things like a tv so it can be used as a htpc, dock + keyboard maybe, or even ubuntu would all be helpful.

After having an HTC Thunderbolt for almost 2 years, there's no way I'll buy something from HTC anytime soon. I had problems with mine from day 1, with some issues never being fixed. It took months for them to release a patch to fix the rebooting issues (mine would reboot randomly multiple times every day). The battery life when connected to 4G was partially fixed after about a year. HTC promised an update to ICS in August 2012, but it looks like that will never happen.

In March, I'll be free from the 2 year contract, and so far it's looking like I'll do a Nexus 4 on a prepaid plan.

HTC had the flagship Sprint WiMax phone, the EVO 4G and it sold very well. Then when eveyone else decided to leapfrog them and go LTE, and Sprint decided to follow, HTC came out with the EVO LTE.

The problem is that Sprint hadn't built out LTE yet. It was a phone that didn't work anywhere (at least for data). Tough luck for HTC (at least on Sprint).

Now Sprint is building out their LTE a bit, and HTC is coming out with the phone code named M7. The leaked specs look very good.

I think HTC will do okay. Though it is one heck of a competitive market.

Since I'm one of those people who likes to hold onto things until they break (I still have the original HTC EVO), I'd love to see the phone manufacturers handle updates differently.

Here's my idea: The problem is that they make no money from updates. They'd rather you buy a new phone. That can be changed. After two years, charge $15-20 a year for updates. Then they can make money from people who already have their phones--money without having to provide hardware. Then they'd have a financial incentive to have their software team keep their old phones up to date. The phone companies should like this too because they wouldn't have to spend all this money subsidizing phones. Because phones are generally not interoperable, a customer who keeps his phone is loyal customer.

Phone manufacturers make money from old phones----check.Phone companies don't have to subsidize as many phones---check.Phone companies keep loyal customers---check.Customers' phones stay up to date---check.Android is less fragmented---check.Less waste---check.

I've had some pretty negative experiences with HTC and this is coming from someone that has been accused of being an Android fanboy before.

- Battery life on all HTC devices is universally poor

- While material choices do give a premium feeling, the long term durability of their devices is worse than the competitions; a disproportionately high percentage of their devices seem to fare worse with the usual wear and tear that smartphones get, with broken volume buttons, dust under the screen, etc being problems

- Sense ... it's just slow and bloated

- They also seem to be worsening existing problems by sealing the battery and removing expandable storage options

- Like all phones, HTC phones have bugs on release; the problem is that HTC seems to be slower than other firms at responding

- The few times I have had to deal with HTC tech support, it hasn't been positive and judging by the response from other's I've talked to, the percentage of satisfied to unsatisfied customer is lower than other firms

I don't think it's a marketing issue. I think the real problem is that their products just aren't as compelling as the competition and that their support sucks.

Marketing isn't the solution. I owned a One S and now a GS3 - Samsung is just making better devices. HTC does a complete OS and driver overhaul with Sense, and it's resulted in longer waits for OS updates. They've always been out of touch with battery life. Beats is a useless gimmick. They have nice industrial design, but so does everyone else at this point.

I wish they'd step away from Sense, focus on battery life the way Samsung and Motorola have, and pair it with their good design. And maybe try to lead the pack on non-Nexus OS updates.

They also seem to be the heading toward enclosed batteries and no SD cards on most of their new handsets. Maybe they'll realize that the decision isn't resulting in more users.

HTC needs their own OS. as does Everyone pretty much, you just can't rely on a third party company to provide an OS anymore, which IMO is an incredibly good thing.

I really hope HTC will stay in business.I still enjoy my Desire S even though it is pretty old by now. I liked the quality and can't complain about battery life. I charge my phone about once every 3 days. I will buy a HTC again if their phones are still as good when my desire is getting to slow for the things i want to do with it, which could be rather soon.I have to confess i did not take a look at their recent models, yet.

It's the One-X. Anyone who's been on the internet knows that. Maybe you don't but that's okay.

If your point was to show how HTC has bad marketing, then please RTFA; that's exactly what they plan on doing better.

Sorry, maybe I wasn't clear enough.

HTC's flagship device is the One-X. Anyone knows that. Except that it's not available on Verizon and there is this other flagship device called the "Droid DNA by HTC" which has a better screen. Oh and Sprint don't offer this device but one called the "HTC EVO™ 4G LTE" which shares many of the same features, but not the name. Hang on, there is also the "HTC One XL", an LTE variant of the One X available outside of North America. But wait, the HTC website has the "One X+" which actually appears to be the flagship device.

But you said anyone on the internet knew it was the One-X

Lets look at Samsung, there is the Galaxy SIII, it's everywhere. The one down from that is the Galaxy SII, that is also everywhere. Sadly there is also the "Galaxy SIII mini" which was a bit of a marketing screw-up because it implies that it's just the SIII but smaller, however that's not quite the case. But hey, it's less confusing than HTC because at least we can advertise the Galaxy SIII, the Galaxy SIII mini and the Galaxy SII worldwide and people know what it is.

Marketing isn't the solution. I owned a One S and now a GS3 - Samsung is just making better devices. HTC does a complete OS and driver overhaul with Sense, and it's resulted in longer waits for OS updates.

Sense and TouchWiz have nothing to do with longer waits for OS updates. That's entirely down to the bureaucratic bullshit red tape known as carrier testing/approval.

I've worked for two carriers and with HTC, Asus, Pantech, Palm and Samsung launching phones and smartphones and I can tell you that carrier testing generally takes 1-2 months depending on the number of defects found.

The longest part of the whole software update process is the development work inside the OEMs - some of which will be related to the UI skin but also for integration of all the various patches and modifications they've done to the core code, not to mention their own internal QA.

Advertising? Maybe they should put back the MSD slot in their hi end phones.The HTC one series was better looking than the Galaxy s3 buti had to go s3 because i needed more storage for my 1080p video captures, my games,my music etcWhen will HTC realize that android consumers arent apple consumers.

I hope they can make a good phone, I'm still with my G2 (yeah, I know, but it works for me), its been great, and the physical keyboard has been great, too. I'd like to get a phone from then when I upgrade, and as much as I love my current phone, none of their current line is compelling.And I may be one of the few who would appreciate the Beats audio...

My first smartphone was a mytouch 4G made by HTC. I loved that phone and it introduced me to the wonderful world of Android but I had absolutely NO loyalty to HTC when it came time to upgrade my phone.

Why?

1) Sense. I completely agree that the average consumer doesn't necessarily demand stock android but Sense is more different than most skins from stock android. Everything from application switchers to the way the browser zooms is fundamentally different and in some cases annoying. Even when I tried an alternative browser it would still behave in certain ways like the HTC browser and not the way I wanted. The only way I had at the time to make the phone do what I wanted was to install a custom rom.

2) HTC doesn't have a flagship phone. I know people will say One X or One series... No. In the US at least there is a different best HTC phone on each carrier and if I were to buy an HTC phone I have very little guarantee that this will be the phone that HTC will continue to care about after I have forked over my money. This is VERY important for Android phones because of the update issues. With Samsung do you think any user has any doubt at all that Samsung will support the Galaxy SIII? No. But if I buy a One S on T-mobile I have real concerns that HTC will take their time getting to issues that are specific to my device (and this is probably a best case scenario. I would never buy a Droid DNA for this reason even though it seems like a nice piece of hardware).

3) Completely subjective but I think their bulging camera lenses on the back of their phones are really ugly and functionally kind of questionable. I find a lot of their flagship designs rather bulky too.

Note that SD cards, locked bootloaders, removable batteries etc. are not the real issue. And marketing issues will be resolved with a unification of the product line.

HTC needs to come out with a real, widely available flagship phone that doesn't have any achillies heels.

HTC does a complete OS and driver overhaul with Sense, and it's resulted in longer waits for OS updates.

Sense and TouchWiz have nothing to do with longer waits for OS updates. That's entirely down to the bureaucratic bullshit red tape known as carrier testing/approval.

It became very clear in the second half of 2012 that the slow update problem was stemming from HTC...on Sprint the Galaxy S3 got Jelly Bean nearly a full 2 months before the Evo LTE. Of course it still could have been a snag in carrier testing, but there were several people on XDA and other Android forums indicating Sprint had told them they were waiting on HTC during that delay.

I don't know the situation there in the US, but here in South East Asia no one buys HTC anymore. The enclosed batteries and the lack of a microSD slot is a dealbreaker. Not to mention HTC is constantly more expensive than equivalent models from other brands. One of the reasons why the SGS3 and Note 2 is the defacto choice for a high-end Android these days is because microSD cards are super cheap (a 32 GB is give or take $20 depending on speed) and the abundance of "extended"/fat battery packs if the stock battery isn't cutting it. Not to mention Samsung is cheap here and offers the best camera quality among Androids. You can get an SGS3 here off contract/unlocked for under $500.

I'd also like to mention that Motorola is almost non-existent here in SEA.

I love their phones, but... (and I know this is a common problem for android) my girlfriend has had the droid incredible 2 for a year now and there is still no ICS update, and the last word heard was back in November after the update was promised in August...

While I agree with some that marketing isn't THE problem, it is A problem. Samsung spent almost $12 billion on marketing in 2012. That's responsible for a lot. Of their sales increases in all their consumer product lines. No one else comes even close to that budget.

The problem small companies have is the they need to market as much as much larger companies. So HTCs small sales are to those who don't care about marketing, and know about the products otherwise. But Samsung's constant pounding on Tv and elsewhere does have an effect.

A lot of people mention the lack of expandable storage but I'm not sure it's an issue to most people. What is an issue however is having only one option for your internal storage. F.i. the 8X only has 16 GB, which I could imagine for a lot of people looking at a premium phone would not be enough.

So if you dont offer expandable storage, at least make sure there is choice between a lower and higher capacity version, not just for your One X+.

The 2nd issue which many people mention is too many models indeed. With so many variations, more bugs creep up, which take longer to fix, and the update path takes longer as well.

Third issue would be battery life. From all manufacturers they have the worst repution. Everybody knows that but HTC still seems in denial about that.

Their cameras have also been rather mediocre up to recently. I havent seen hi-res pictures from the One-series but some sample pictures looked oversaturated and rather processed to me. A bit similar to what they are doing with Beats to their sound, spice it up to make up for the lack of image / audio quality.

Sense I think they solved their main issues with the latest Sense 4.0 Before it was overly bloated and plain ugly as a skin. The newer one seems more refined and a bit leaner but they have tarnished their reputation with it. I think a lot of people, including me, were actively avoiding HTC in the past just because of Sense. So repairing that reputation damage seems like the hardest thing for HTC to accomplish.

And then there is the general lack of brand recognition. There seem enough HTC commercials around, so increasing them, not sure if that would help anything. Acquiring Beats was probably a wise thing to do, at least i could understand it even if i dont really give anything for it, but hasnt really paid off for them either.

They are in the 2nd league now competing on one hand against brands with wide brand recognition like Sony, Nokia, Motorola and even LG and on the other hand with low cost chinese brands like Huawei, ZTE, Meizu and Oppo. Pretty much caught between a rock and a hard place.

Apple gets away with having fully-sealed systems because they offer phones up to 64GB and their batteries will frequently last me two, sometimes three days. HTC phones have non-removal batteries, non-expandable storage (with maxes of 16GB or 32GB), and they don't get particularly good battery life.

If the whole point of a sealed battery was to squeeze larger batteries into a given space, then they've failed pretty badly at it: my Galaxy SIII (with its removable battery) gets far better life than any HTC phone I've tried, including the One series. Samsung's removable battery is 2,100mAh (despite the space needed for an SD slot), whereas the One X's non-removable battery tops out at 1,8000mAh, and it can't be replaced in a year or two. I think the One X might even have a slightly larger overall volume, which says to me that HTC's engineering is really falling behind at this point.

I too would like HTC to succeed. They make solid hardware, and for the current generation at least, their cameras are second to none. My current phone -- an HTC Incredible 2 has been good to me, surviving various drops and giving very good battery life. I'd gladly buy another HTC phone, but I currently can't because there isn't a good one on Verizon.

The droid DNA had the potential to be a great phone, but they left out the microsd slot, and with only 10GB of available storage, it's a non-starter for me. I take a fair number of pictures/videos and use my phone as my music player at home, work, and in the car, so 10GB just isn't acceptable. Some don't care for the non-removable battery, but reports are that battery life is decent, so that wouldn't have been a show-stopper for me the way the lack of removable storage is. The combination will certainly put off a large number of people though. The puzzling part is that the Butterfly, on which the DNA is based, has a MicroSD slot. Ultimately I know that given the limitations, and exclusivity to verizon, it'll never be a 'popular' phone, and that in itself puts a damper on sales, as I know it'll never have the volume of accessories etc. that something like the GS3 has.

My suspicion is that the ultimate problem is HTC's size. I think they just don't have the clout to tell carriers that they're going to make XYZ phone, and the carrier can take it or leave it. Carriers like custom/exclusive phones and presumably do whatever they can to make that happen. So for instance, in order to get the droid DNA on verizon, they had to bow to Verizon's desire to not have removable storage (this is good for verizon, as they get to sell more data). Sprint has unlimited data, so they don't have a vested interest in directly encouraging data usage, so their version of the HTC OneX has removable storage, where others didn't. Ultimately this is bad for HTC, since they end up with the problem others have mentioned -- no unified brand/flagship device, which leads to poor sales.

It may also be that HTC just doesn't have the manufacturing capacity to be able to produce a device like the GS3 at the required quantities.

The above unfortunately doesn't explain the lack of removable storage and smallish battery on the generic OneX, but at least the OneX is available in a 32GB configuration.

HTC quarterly results just came out, and wow is it ugly. Profits dropped 91% - basically they are barely breaking even now - which means they will have limited funds to put into developing and marketing future handsets. Samsung steamrolls another OEM...

Florence Ion / Florence was a former Reviews Editor at Ars, with a focus on Android, gadgets, and essential gear. She received a degree in journalism from San Francisco State University and lives in the Bay Area.